A Montreal-based economic think tank is calling on the federal government to slash tens of thousands of public service jobs as part of what it describes as an “ambitious” plan to restore fiscal discipline and curb government spending.
In a pre-budget submission, the Montreal Economic Institute (MEI) recommends cutting approximately 64,000 federal public service positions — a move it says could save taxpayers up to $10 billion annually.
The proposal, made ahead of the 2025 federal budget, urges the Liberal government to take inspiration from the fiscal reforms of former Prime Minister Jean Chrétien, whose administration downsized the public service by 17 per cent over five years in the 1990s.
“For the present government to follow suit would require gradual reductions totalling approximately 64,000 civil servants,” the report states. “This would represent a significant contribution to restoring budgetary balance via better spending control.”
According to MEI, the federal public service has grown by 100,000 employees between 2015 and 2025. As of March 31, 357,965 people were employed in the federal public service — down from 367,772 in 2024, according to data from the Treasury Board Secretariat.
To achieve the proposed reductions, the think tank recommends not renewing temporary contract positions and introducing hiring freezes in some departments.
The submission comes as the Department of Finance continues its public consultations on the upcoming budget, with submissions open until August 28.
In July, Finance Minister François-Philippe Champagne and Treasury Board President Shafqat Ali issued a directive to cabinet ministers to identify up to 15 per cent in savings across all federal departments over the next three years — part of a broader plan to trim $25 billion from federal spending.
However, MEI says that goal may fall short: “The government’s current reduction target of 15 per cent seems insufficient given its stated desire to increase capital spending.”
In addition to shrinking the public workforce, the think tank also calls for the government to:
- Eliminate costly new programs, such as the Canada Dental Care Plan and proposed national pharmacare.
- Privatize Canada Post.
- End subsidies to businesses.
“Canada’s new government must make fiscal discipline one of its priorities for the next budget,” the report says. “Better control of spending is needed to return to balanced budgets and avoid placing an undue burden on future generations.”
This recommendation aligns with a May report from MEI which similarly advocated for a Chrétien-style review of public service efficiency.
In contrast, a July report from the Canadian Centre for Policy Alternatives (CCPA) projected that 57,000 full-time federal jobs could be eliminated by 2028 as part of current cost-cutting efforts — including over 24,000 positions in the National Capital Region.
With fiscal pressures mounting, Ottawa now faces competing calls for restraint and caution as it prepares its next budget — one that will undoubtedly shape the future of the Canadian public service.